TMI Blog2019 (1) TMI 1969X X X X Extracts X X X X X X X X Extracts X X X X ..... s pending before the Hon ble Supreme Court and recently Hon ble Gujarat High Court in [ 2018 (10) TMI 1632 - GUJARAT HIGH COURT] has held that two clear ways are possible to enable the appellant-assessee to get benefit of the judgment of the Supreme Court, in case the High Court judgment is reversed by the Hon ble Supreme Court - A.R. requested that in view of the order passed by the Hon ble Gujarat High Court as aforesaid therefore this matter may be restored to the file of the ld.CIT(A). Appeal is allowed for statistical purposes. - ITA. Nos: 3058/AHD/2014 & 2599/AHD/2016 - - - Dated:- 30-1-2019 - SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For the Appellant : Shri Nirmit Mehta, CA For the Respondent : Shri Lalit P. Jain, Sr. D.R. ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. These two appeals filed by the Assessee are directed against the order of the Ld. CIT(A)-IV, Ahmedabad dated 12.10.2006 pertaining to A.Y. 2011-12 2012-13. The assessee has taken following grounds of appeal for A.Y. 2011-12: 1. The learned Commissioner of the Income Tax (Appeal) - III, Baroda [ the CIT(A) ] erred in fact and in law in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Incentive to sales representative Incentive Is calculated each quarter and paid at the end of the following quarter Yes Sales Incentive paid to star performer of the year This Is based on last year's performance and paid In the beginning of the following year Yes Special Directors prize to best performer This Is based on lest years performance and paid In the beginning of the following year Yes You have raised a question about payment of Incentives to staff which pertains to prior period, As it has been clarified In the course of discussion during personal hearing, It has been a practice of the company for the past 15 years that sates Incentives for a quarter are always paid in the following quarter, Such practice Is adopted to ensure that the staff engaged In sales does not take short term measures where they dump material to earn incentive, collect their Incentive end eventually leave the job. This works adversely to the Interest of the company as company would be booking sales which may result Into sales return or affect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own to the company. Therefore the expenses related to earlier year cannot be granted In the current financial year. Further It Is also observed that TDS has not been deducted on , the said payment. Accordingly expenses to the tune of ₹ 21,14,742/- pertaining to the period April 2009 to March 2010 are disallowed and added to the total income. 3. Against the said addition, assessee preferred first statutory appeal before the ld. CIT(A) but to no avail and ld. CIT(A) dismissed the appeal. 4. Now appellant is before us. 5. Appellant is a pharmaceutical company for the purpose of payment of sale incentives to employees and as per the system being regularly followed by the appellant incentive for a quarter is always paid to the General Manager Sales representative and Special Director price to best performer. And this system has been regularly followed by the appellant for the past 15 years. The appellant case is that it was having taxable income in previous and following years, so any such adjustments shall be tax neutral for a period of time. But the fact remains that the appellant was very well aware of the quantity of sales made by these persons at the time of final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company paid certain commission to doctors -Assessing Officer relying on Circular No. 5/2012. dated 1-8-2012, which prohibits pharmaceutical companies from giving any monetary benefits to doctors, disallowed said payments of commission - Assessing Officer also passed a penalty order under section 271(1)(c) in respect of said disallowance - It was noted that Co-ordinate Bench of Tribunal in a case involving similar issue had held that Circular, dated 1-8-2012 was applicable from assessment year 2013-14 onwards and, thus, disallowance made in relevant year on basis of said circular was not justified - Whether in view of order passed by Co-ordinate Bench, impugned disallowance made by Assessing Officer was to be deleted - Held, yes Whether as a consequence thereof, penalty order passed under section 271(1)(c) was also liable to be quashed - Held, yes [Paras 2.10 and 2.11] [In favour of assesses] 12. Since our bench has already given relief to some pharmaceutical company, therefore, we allow this ground of appeal. 13. Now we come to ITA No. 2599/Ahd/2016 for A.Y. 2012-13 and confirming the disallowance of Employees Provident Fund of ₹ 2,23,110/- u/s. 36(1)(va). 14. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose. On account of this, the Revenue C/TAXAP/1186/2018 ORDER did not permit deduction of such sum from the income of the assessee. Such disallowance thereupon became the subject matter of appeal before the Tribunal. The Tribunal dismissed the ground, relying upon the judgment of this Court in the case of Commissioner of Income-tax vs. Gujarat State Road Transport Corporation Limited, reported in 366 ITR 170 [Gujarat]. Counsel for the appellant did not dispute that the issue on hands is squarely covered by this Court in the case of CIT v. GSRTC [Supra]. He, however, submitted that the appeal is pending against the judgment of the High Court before the Supreme Court and SLP has been granted. The amount involved is not very large and it would be extremely expensive for the assessee to carry this in appeal before the Supreme Court. He, therefore, suggested that the benefit of this judgment of the Supreme Court may be made available to the assessee; as and when rendered and in case, the judgment of the High Court is reversed. Two clear ways are possible to enable the appellant- assessee to get benefit of the judgment of the Supreme Court, in case the High Court judgment is rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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